Insurance. The word alone evokes imagery we could all live without, quite happily.

You can see it all now, can’t you? Filling out mountains of tedious forms, engaging in lengthy telephone calls, following all those procedures, monthly debit orders and dealing with all the anxiety which accompanies any lifelong commitment.

And yet, today, it is almost vital. None among us, for example, want to leave this world the same way we entered it – as a burden on our family.

Insurance can be incredibly fascinating, though.

The typical person will approach an insurance agent with a standard policy in mind. A policy that covers tragedy. This could include injuries, death, theft or property destruction. Essentially, health, life, vehicle or home insurance will cover these common risks. But, what about the risks you haven’t thought about? Those which are tricky to spot and difficult to cover.

There are many other things which people may want to protect from threat or danger. A singer, for example, may want to insure their voice. A famous artist may want to insure his hands. These are pretty commonplace, too. Sometimes though, if history is anything to go by, things can get a little strange in a hurry.

That’s not to say that common forms of insurance are without surprises. Most of the time, people don’t understand half of the policy they’re paying for and what it can do for you.

And then, insurance, in itself, has an interesting history. Where, how and why did it begin?

The Origins Of Insurance

Where did it all begin? Well, that all depends on how you look at it. In terms of risk management, we could probably credit the Chinese. Traders travelling along treacherous river rapids would cunningly distribute risk by spreading their wares across multiple vessels. If one of these were to capsize or get robbed, it wouldn’t be so great a loss than if they’d risked the entire lot on one single boat.

Merchants were also behind the modern form of profit insurance, and likely created the first known contracts by underwriting risks for fellow merchants on a part-time basis.

According to Insurance ZA, the earliest authenticated insurance contract was a marine insurance contract written in Italian. It appeared in the form of a maritime loan aboard a ship called ‘The Santa Clara’ dated 1347, in Genoa.

These insurance contracts usually took the form of a fictional sale or loan. Trading capital was loaned to travelling merchants, and the risk of loss due to robbery in transit or any other threat was borne by those who provided the loan. In return for undertaking this risk, the lender would add an exceptionally high rate of interest to the loan.

The origins of life and health insurance could probably be traced back to the Greeks and Romans, who formed organised societies which afforded its members certain benefits. These would have included paying for a member’s burial upon death. In return for these benefits, members were to make regular contributions to the society.

Before long, the idea of modern insurance spread through the European continent and reached England, where it slowly evolved into the form we’re now familiar with, complete with 2-hour long, hammy infomercials.

What Most People Don’t Know

More than ever before, people are aware of the importance of having insurance. Despite this cognizance, many still refrain from taking that step. This could be due to the myths and misinformation which surrounds the industry, creating confusion and ambivalence.

Among these misconceptions are included:

You don’t need life insurance if you’re single;

People who have prevailing health issues, Smokers and those who take part in dangerous sports will never be covered;

You don’t need life insurance if you’re wealthy, etc.

Other misconceptions border on the delusional, such as the misbelief that the colour of your car plays a role in the premium costs. It has been said that those who drive red or black cars pay more than others. In truth, insurers couldn’t care less about the colour of your vehicle. They’re much more concerned about where you live, how much driving you do and if you have a habit of ploughing your car through other people’s houses or not.

Another little known fact is that insurance companies were among the first to warn people about the risks of climate change. Munich Re, one of the biggest reinsurance companies in the world, has been warning us about climate threats since 1973. Today, insurers still employ some of the world’s leading climate science teams.

Different types of insurance may also cover a number of surprises, so it’s always worth checking on these with your broker. Homeowner’s insurance, for example, may cover your dog biting the pizza delivery guy, identity theft, mandatory upgrades, etc.

It Gets A Little Strange

It is impossible to mention out-of-the-ordinary insurance without thinking of Lloyd’s. Lloyd’s of London, a specialist insurance market, has a long history of insuring the strangest things.

In 1957 they insured the taste buds of world-famous food critic, Egon Ronay, for $400 000. Ex-Australian cricketer, Merv Hughes, once took out an estimated $370 000 policy on his trademark walrus moustache. At the height of his powers, Riverdance and Lord of the Dance star, Michael Flatley, insured his legs for an astounding $47 Million. Bob Dylan, Bruce Springsteen and Rod Stewart have all insured their voices and vocal cords. The incredible list goes on and on.

It isn’t that uncommon for stars to insure the tools which have made them so famous. What about ordinary people going for strange forms of insurance? While some of it may seem just plain crazy, having insurance is in large part all about peace of mind. You may not have the overwhelming desire to insure your reed-thin singing voice or your chest hair or anything like that, but perhaps there’s something in your life giving you sleepless nights.

It’s all about risk management.

Some women, for instance, may opt for Multiple-Birth policies, just in case they only ordered one child and ended up with an extra one. Extra money would sure help.

In the past and sometimes even today, large companies have taken out Corporate-Owned life policies on low-level employees. This allowed the companies to profit from their deaths, even if the employee in question had left the company a long time ago. This practice became known as Dead Peasant Insurance.

Alien abduction, kidnapping and ransom, getting left at the altar by a lover with cold feet, etc. There are very few tragedies you couldn’t get insured against.